Average Power Purchase Cost from conventional plants up about 7% in FY21

The Central Electricity Regulatory Commission (CERC) has calculated the average cost at which states purchased electricity from non-renewable energy sources in FY21 to be at Rs 3.85 per unit. The figure is about 7 per cent higher than the average price applicable in FY20—Rs 3.60 per unit. The average cost of purchase is the weighted average pooled price at which the Distribution Licensee (discos) has purchased the electricity including cost of self-generation. 

As per the CERC’s calculations, the states consumed 1,118.6 billion units of non-renewable electricity in the fiscal. Power from conventional sources comprise more than 90 per cent of electricity supplied in the country.

The national-level average power purchase cost (APPC) is derived by computing average prices paid by all states/UTs, weighted by volume of conventional power purchased by them. The major states, which pay the highest power prices, are Assam (Rs 5.14 per unit), Uttar Pradesh (Rs 4.45 per unit), Karnataka (Rs 4.38 per unit), Bihar (Rs 4.256 a unit) and Maharashtra (Rs 4 per unit).

The national APPC for FY17, FY18, FY19 and FY20 were Rs 3.40/unit, Rs 3.48/unit, Rs 3.53/unit and Rs 3.60/unit, respectively.

Electricity tariffs from thermal generating stations are determined either by the cost-plus system (based on actual expenses and expected returns), or through competitive bidding. APPC helps in the calculation of penalties payable by open access and captive wind and solar generators for deviating from their respective scheduled electricity supply volumes. 

Electricity tariffs from thermal producing stations are determined either by the price-plus method (based on actual expenditures and anticipated returns), or via competitive bidding. APPC assists in the calculation of penalties payable by open access and captive wind and solar generators for deviating from their respective scheduled electrical energy provide volumes.        

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